Automobile sales grew 14% in January 2023

Automobile sales grew 14% in January 2023 compared to January 2022. The trigger was a surge in festival sales, weddings and turnaround in demand in the rural economy. It must be noted that the automobile sales numbers are put out by the Federation of Automobile Dealers Associations (FADA) and are based on actual vehicle registrations on Vaahan portal. This is different from the numbers released by SIAM, which is wholesale dispatches to dealers.

Vehicles across categories performed strongly with two-wheelers growing 10%, three-wheeler 59%, passenger vehicles 22%, tractors 8% and commercial vehicles 16%. All these growth numbers are on a yoy basis for the month of January 2023. On the passenger vehicle (PV) segment, the order book has been continuously growing. The surprise factor was the surge in rural demand, which could be attributed to farmers getting decent prices as MSP.

Overall retail sales continue to be around 8% below the pre-pandemic levels of January 2020. This is largely because the rural markets are yet to fully revive as the cost of ownership had shot up while disposable incomes had not. The passenger vehicle segment was the only segment to show decisive growth. It grew 22% over 2022, 10% over 2021 and 8% over the pre-pandemic period of January 2020. The waiting period for compact SUVs, SUVs and luxury vehicles is 2-3 months.

Maruti maintained leadership in PV sales, with 44% market share followed by Hyundai Motors and Tata Motors with 13% share each. The CV segment also saw robust growth over the previous years on the back of sustained demand led by replacement of fleet and growth in freight availability.